The G-10 rundown
USD – the greenback pulls back higher, but trading ranges remain profoundly uninspiring at the moment. Most interesting development in US markets the steep sell-off in long treasuries – all other things equal looks USD supportive against JPY and CHF. Some $80 billion of 2-year and 5-year US treasuries to be auctioned on Monday, and a 7-year auction to follow Tuesday.
EUR – what to like? Still, given recent trading themes, the euro may actually outperform the more risk-sentiment linked currencies (note the EURAUD and EURNZD price action recently) if risk sentiment rolls over again.
JPY – focusing mostly on long US treasuries as a possible driver for USDJPY strength, given the size of yesterday’s sell-off. Could be a dynamic week next week for US rates as heavy supply from US Treasury auctions hits the market early next week.
GBP – no, please no – May reported to pursue an Article 50 delay – we had hoped that the odds of this were fading.
CHF – we have thoroughly lost interest here in EURCHF, though USDCHF interest for more upside could pick up if US long rates continue to rise.
AUD – the Aussie still looks heavy after the coal import news (more above) and we’ll see if the downside can pick up momentum next week despite the profoundly positive hopes for a friendly US-China trade deal and China maintaining a strong bid under its currency.
CAD – USDCAD bounced back higher from the key 1.3150-1.3200 pivot zone and could be set to extend that bounce if risk sentiment continues to sour broadly and especially if Canada’s December retail sales report today sours worse than the -0.3% expected.
NZD – we have cast about for a catalyst for selling the overvalued kiwi and may have found one overnight as the Reserve Bank of New Zealand threatened the need to cut the policy rate if a proposal
to raise Tier 1 capital requirements is implemented . A close above about 1.0500 in AUDNZD a catalyst for long positions there and NZDUSD looks like it is rolling over again, assuming any USD pair is capable of trending again.
SEK – the krona remaining friendless and running out of range in EURSEK while mulling those 16-year highs in USDSEK. A roll over in risk appetite to the negative side could aggravate the krona’s slide.
NOK – EURNOK bears under pressure here if the price action remains bottled up above 9.70, especially if the long bout of price action in energy markets roll over.
Upcoming Economic Calendar Highlights (all times GMT)
0700 – Germany Q4 GDP Revision
0730 – Sweden Riksbank’s Ingves to speak
0900 – Germany Feb. IFO Survey
1000 – Euro Zone Jan. Final CPI
1315 – US Fed’s Bostic (non Voter) to speak
1330 – Canada Dec. Retail Sales
1530 – ECB’s Draghi to speak
1700 – US Fed’s Clarida (Voter) to speak
1830 – US Fed’s Bullard to Speak on Balance Sheet